Thursday, 11 March 2010

Law updates - General (Malaysian law unless otherwise stated)

HC = high court 
COA = court of appeal 
FC = federal court
Ngu Toh Tung & 7 Ors v Superintendent of Lands & Survey, Kuching Division, Kuching & Anor [COA]

administrative law; land acquisition

J & C New Poly Catering Sdn Bhd v TTMP Bakun Consortium Sdn Bhd [HC]

The general rule is that a high court will not issue an injunction to restrain the execution of another high court order. However, the high court possesses inherent jurisdiction to do justice in each case. Thus, an interim injunction could be issued to restrain execution of a decree if it could be shown that the execution would result in an injury to the party against whom the execution was directed at. As a matter of practice, applications for a garnishee order are made before the sar or dr and the decision is appealable to a judge in chambers. Even though under the rules of the high court 1980, service of originating process or other court documents on a corporation or company should be done at the registered address, if it was within the knowledge of the solicitor that was going to effect service that the registered address of the defendant was closed or unmanned, it was incumbent upon the solicitor to inform the defendant. On the facts, the service of the writ was irregular thus affecting the default judgment in question. In any event, the default judgment can be set aside. The issue whether the defendant's money deposited in a current account with the garnishee was a debt owing by the garnishee to the defendant ought to be put to trial. It is a well settled principle that a shareholder in a company has no say in the running of company affairs. The function is the function of the board of directors or anyone of the directors assigned by the board of directors of the company - Udam who was no longer a director of the company had no authority to decide for the company or move the court.

MR Properties Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [HC]

Under the scheme of taxation in Malaysia, there is no possibility of an overlap between tax payable under the ITA and under the RPGT as the latter is only levied in a situation where the ITA is not applicable. Thus if the gain is from the sale of an asset and was found to be in the nature of income, then the assessment cannot be under the RPGT because such gain should be taxed under the ITA. There is therefore no possibility of a taxpayer being liable to both taxes on the same gain.  

Abdul Razak bin Baharudin & 7 Ors v Ketua polis Negara & 2 Ors (and another appeal) [FC]

Any challenge against an act done by the minister under s 8 of the ISA may only be mounted on the grounds of procedural non-compliance. The crux of the appellants' first ground of appeal was that the grounds of detention did not fall within the scope of the ISA. This was an allusion to the detention orders being issued mala fide. However, this did not fall within the ambit of procedural non-compliance. There is no procedural requirement provided by law that the minister must first consider criminal prosecution before issuing a detention order. This issue, as raised by the appellants, related more to the issue of mala fide, which could not constitute a proper challenge to the detention orders. There is no procedural requirement that the report to the minister be disclosed. This ground was used, in effect, to challenge the bona fides of the detention orders which was not available to the appellants.  

Public Prosecutor v Tan TATT EEK [FC]

The high court's drawing of inference, based on the respondent's conduct and appearance, that he knew the nature of the contents of the plastic bag was not justified on the evidence. The factum of the respondent having dropped his bag and displaying a reaction of shock is equally consistent of that of an innocent man. The court must be provided with clear evidence of a set of facts which leave no other possible, or alternative, inference that may reasonably be drawn. In the absence of such evidence, the court cannot but hold that there are other inferences possible in the circumstances. Hence, the fact that the respondent dropped the bag and being in a state of shock could not constitute knowledge of the contents of the plastic bag. There was insufficient evidence to support the inference of knowledge in instant case. In the absence of an express finding of possession, the learned judge ought not to have called upon the respondent to enter his defence on the charge of trafficking. The grounds relied on by the learned judge to find the respondent guilty of trafficking were untenable and unsustainable. At most, the prosecution had only proved custody and control of the plastic bag, and under s 37(d) of the DDA, the presumption could have been invoked for possession and knowledge of the nature of the drugs.

Sejahratul Dursina @ Chomel Binti Abdullah v Kerajaan Malaysia [FC]

Whether a writ of habeas corpus could be issued in respect of a detainee who had been released - under both s 365 of the criminal procedure code and article 5(2) of the federal constitution, the only remedy provided for a person allegedly detained illegally is to be released. A person may only be released if his detention is found to be illegal or improper. Therefore, a writ of habeas corpus is only available to a person being physically detained unlawfully, i.e. in actual custody. Where a person has been released, the writ of habeas corpus becomes nugatory. Cheow Siong Chin is clear in that the restraint imposed by reason of an order of restricted residence did not constitute detention of such a nature that would attract the application of a writ of habeas corpus. A person subject to a restricted residence order is not being physically detained, imprisoned or in custody and as such, a writ of habeas corpus is not available to him. The appellant, being a restrictee rather than a detainee, could not avail herself of a writ of habeas corpus. A date of hearing and a date of decision cannot be separated since the date fixed for decision in fact forms part of the hearing. Even on a date fixed for decision, counsel generally seek, and are usually allowed, to make further submissions, clarifications, or to put forward a newly discovered authority. The hearing of an application would therefore include the date of decision.

Sayang Plantation Bhd v Koh Siak Poo [COA]

With the acceptance of the cheque by the appellant and without the deposit of the original title deeds, the appellant no longer had any lien over the subject land. The lien ceased to exist in fact and in equity from October 21, 2002 as regards the balance of RM62,249.13. Consequently, that balance of the judgment debt lost its character as a secured debt and the appellant had in law, by their letters made an election to recover such balance as an unsecured debt. The legal implication arising therefrom was that recourse under s 281(2) was no longer available to the appellant to realise the balance of the judgment debt plus interest because it was not a secured debt. Being an unsecured debt, the appellant would have to resort to other remedies available to enforce that part of the judgment. Since the lien ceased to exist from October 21, 2002, it followed that the appellant ceased to be entitled to the benefit of such lien from that date. Thus, the conclusion would be that the caveat served no protective function from that date, ought not to remain on the land register and ought to have been withdrawn forthwith, which the appellant was duty bound to do. The judge below would have been well justified under s 331(4)(a) to order its cancellation with effect from that date if in fact it had not subsequently been withdrawn. The caveat had in effect gravely curtailed the rights of the respondent as registered proprietor in that it wrongfully prevented him from dealing with the subject land over that period when the lien ceased to exist and with that, the appellant's entitlement to the benefits thereunder. Under such circumstance, the failure to withdraw the caveat before march 18, 2003 "has caused damage or loss" to the respondent as envisaged under s 331(4)(b). The appellant was liable to pay the respondent compensation for damage or loss caused to the latter from October 21, 2002 to march 18, 2003.  

Bank of China v Ngan Ching Wen [HC] 

The essence of the defendant's case was that the plaintiff owed him a further duty of care to sell the charged shares when the market was good. However, the defendant was vague about the dates when he alleged the charged shares should have been sold and failed to adduce any evidence of the market value of the charged shares on any specific date to justify his argument. The plaintiff as mortgagee and chargee of the shares owed no duty of care to the defendant as to the timing of the sale of the shares. The provisions of the memorandum of charge gave the plaintiff the right to determine when it chose to sell the security to realise the outstanding amount. This was a contractual right accorded to the plaintiff. The preliminary objection made by the defendant that the plaintiff's application was flawed because the plaintiff ought not to have included the words "and" between limbs (a) and (b) of order 18 r 19 of the RHC, was not one that was made on merits. Order 1A of the RHC clearly states, inter alia, that the court shall have regard to the justice of the case and not only to technical compliance of the rules in administering its provisions.  

HSBC Bank Malaysia Berhad (formerly known as HongKong Bank Malaysia Berhad) v LH Timber Products Sdn Bhd (formerly known as Ho Lim Sawmill Sdn Bhd) & 5 Ors [HC]

In order to challenge a summary judgment application, the defendant in a dispute needs to show that there is a triable issue as to the facts. It is not sufficient for the defendant to merely raise facts, which do not constitute a defence to the claim. Further, the defendant cannot assert a denial of indebtedness without providing proof thereof. As a general rule, any party who makes a formal admission, the said admission is generally conclusive for the purposes of the proceedings. The hire purchase facilities granted to the first defendant were subject to the terms and conditions of the said. Agreements and not governed by the provisions on the duty of facility providers to reduce damages under the act. From the evidence, it was apparent that the parties had agreed that the plaintiff was entitled to charge late interest charges and consequently, it was not open to the defendants to raise such an objection.  

Rapidin bin Kamal v Pendakwa Raya [COA]

It is clear from the learned judge's decision that he was of the view that the appellant's application did not fall within the ambit of s 317 of the CPC. From the facts, the appellant failed to cross the first hurdle in s 317 when making the said application. Hence, it would be premature to consider whether the test as laid down in Che din b Ahmad had been complied with. There was also no reason to interfere with the decision of the learned high court judge as the power to admit additional evidence under s 317 is discretionary.

Syarikat Kemajuan Perumahan Negara Sdn Bhd v Lee Cheng & Anor [COA]

Whatever principles and propositions enunciated in the authorities, must be considered in the light of those rules and regulations that were applicable. They cannot be of universal guide for all cases associated with late delivery of vacant possession of houses classified under the housing development (control and licensing) act 1966 except when the appropriate rules and regulations so applied are similar. In this case, it is without doubt that the 1989 regulations are applicable. Vacant possession with connection of water and electricity to the said building, must include the developer's duty to energize the water and electricity flow into the building. It is not sufficient for the developer to merely lay the connections for water and electricity between the building and the sub-station or water mains. Instead the developer must ensure at the time of delivery of vacant possession, that there is supply of water and electricity, ready to be tapped into the building.  

Yit Kean Hong v Public Prosecutor [COA]

An appellate court will not interfere with the trial judge's discretion in matters of sentence unless the trial court erred in applying the correct principles of sentencing or had exercised that discretion incorrectly. It is an accepted rule of practice that a plea of guilty is a mitigating factor and that such plea would warrant between a 1/4 and 1/3 discount on the prison term provided by law. However, this is not a strict rule and the trial court may refuse a discount where public interest demands a deterrent sentence. Section 282(d) of the criminal procedure code provides that every sentence imposed shall take effect from the date on which it was passed unless the court passing the sentence otherwise directs. In this instance, it was clear that the learned trial judge had taken the appellant's guilty plea into account when reducing the maximum term of 20 years for each charge by 1/4 and imposing a 15-year term. The instant appeal involved 2 distinct offences with 2 separate victims. On the facts, the charge of attempted murder was not subsidiary to the charge of culpable homicide, although both offences were committed in the course of a single transaction. The appellant had acted cruelly and brutally against the defenseless victims and a reduction in sentence or an order that the terms of imprisonment run concurrently would be inappropriate in the public interest.

Ah San @ Goh Ah Soon v Majlis Bandaraya Ipoh [HC]

Application for defendant to be compelled to issue certificate of fitness for shop lot. The redress sought by the plaintiff was clearly not available by way of an appeal to the appeal board pursuant to s 23 of the town and country planning act 1976 (TCP) which does not apply to the refusal, omission or neglect by the defendant to issue a certificate of fitness under the by-laws. The plaintiff was not precluded from seeking an order of mandamus so long as there was strict compliance with the rules of procedure and the requirements of the sra. The statutory appeal provision is inapplicable unless the plaintiff's grievance came within the ambit of s 23(3) of the TCP. The plaintiff's application for an order of mandamus was not properly made as leave of court as required under order 53 r 1(1) and (3) of the rules of high court 1980 (RHC), read with s 25 and paragraph 1 of the schedule to the courts of judicature act 1964. The plaintiff's contention that order 53 r 1(1) and (3) of the RHC was an inferior provision to s 44 of the sra, enabling her to seek relief without first having obtained leave was misplaced. Although the relief claimed by the plaintiff is substantive relief under the sra, the procedure for doing so is clearly spelt out in order 53 of the RHC. Even if the plaintiff did not require leave, the plaintiff's application would still be refused for the following reasons; the plaintiff was guilty of inordinate delay in filing the instant application, i.e. an unexplained delay of almost 5 years from the date her application for the certificate of fitness; the plaintiff's application was time barred under s 2(a) of the public authorities protection act 1948; the plaintiff's inequitable conduct in failing to disclose the existence of civil suit no 22-88-97; and on the facts, the plaintiff was guilty of unconscionable conduct. The plaintiff also failed to disclose that her application to modify the construction of the shop lot had been rejected by the defendant's architect. He who comes to equity must do so with clean hands, disclosing all the facts and background of the case that may assist the court in arriving at a just decision. There was admission by the plaintiff that the relief sought through the instant application could have been included in civil suit no 22-88-97. This was tantamount to an abuse of the process of court, leading to multiplicity of proceedings on the same subject matter, which had been authoritatively decided by a court of co-ordinate jurisdiction and confirmed by the court of appeal. The machinery of the court should not be abused in order that a plaintiff may divide his case into separate compartments to suit his own needs and motives.

Assets Investments Pte Limited v OSK Securities Berhad [HC]

The correspondence between the parties sufficiently evinced an intention of the parties to enter into a contractual relationship and the terms of the agreement as implied from the said correspondence stipulated that the defendant would, for a management fee, procure and manage an asset swap transaction with a third party, for the plaintiff. Based on its oral representations to the plaintiff, the defendant owed a duty of care to the plaintiff in both contract and tort. The defendant was not merely an introducer and the fees paid to it by the plaintiff were for management services, and not an introduction fee, as claimed by it. The representations and assurances that were made by the defendant and relied on by the plaintiff were made to instill confidence to the plaintiff. The defendant should have ascertained with reasonable certainty the accuracy of the facts transmitted to the plaintiff. It is expected of the defendant to exercise reasonable skill, care and judgment in carrying out its duties for the plaintiff. The defendant had failed to prove its allegation that the asset swap transaction was illegal. There was no evidence on which the allegation could stand or be conclusively determined since the defendant had failed to raise it either in its pleadings or during cross-examination of the plaintiff's witness. Damage in this instance was reasonably foreseeable and the loss suffered by the plaintiff, not too remote. The plaintiff had clearly also fulfilled the 3 elements for an award of damages to be granted in its favour. As there was a close and direct relationship of proximity between the parties, it is fair, just and reasonable for liability in tort to be imposed on the defendant. Pursuant to s 74 of the contracts act 1950 and applying the common law for damages in tort as a result of the defendant's breach of duty in contract and in tort, the plaintiff's alternative claim for the lesser sum was allowed.  

Tan Eng Siew & Anor v Dr Jagjit Singh Sidhu & Anor [HC]

Previously, the position regarding the claim of a third party for loss of expense incurred as a result of injury to another person allowed a husband to sue for medical and other expenses to which he has been put as a result of personal injuries inflicted on his wife. However, the law has since changed since the decision in Lai Chi Kay & Ors v Lee Kuo Shin [1981] 2 MLJ 167, which states that "...A third party will have no direct remedy against the wrong-doer...", particularly where the wrong-doer has not committed a breach of duty towards the third party. p1 therefore had no cause of action against both d1, as the alleged direct wrong-doer, or against d2, for being alleged to be vicariously liable for the actions of d1. There are 3 requirements that must be satisfied to ascertain whether d2 was vicariously liable for the alleged wrongdoing of d1. Firstly, there must be a wrongful, or tortious action. Secondly, there must exist a special relationship that is recognised by law between the person alleged to be vicariously liable and the tort feasor. Thirdly, the tort is committed within the course of employment. p2 failed to establish this element of "special relationship" between d1 and d2. This one factor alone, if not satisfied, was sufficient to justify the dismissal of p2's claim against d2 for being vicariously liable for the alleged tortious wrong of d1. D1 was at the material time an independent contractor and had his own set up in the treatment, management and care of p2. d2 only provided the premises and operating facilities for which d1 paid for the use of. d2 had no control over the course or form of treatment, management and care administered to p2.

Alf Properties Sdn Bhd v Ketua Pengarah Jabatan Hasil Dalam Negeri [COA]

It is settled law that income tax does not necessarily follow the system of accounting or account-keeping of the taxpayer at all. The method of keeping accounts is often a guide but is never conclusive in income tax issues. The method of accounting does not alter the character of the sum received. Finally, the practice of accountants, though it were general or even universal, could not by itself determine the amount of profits and gains of a trade for tax purposes. Generally, when considering the question whether a particular transaction to which a taxpayer is a party constitutes a trading transaction, the court would, first of all, have to consider, objectively, whether the transaction has the outward appearance of trading transactions or, in other words, whether the documents and terms thereof were normal when compared to transactions of the like kind in the commercial world and carried out in a similar manner. Secondly, even if a transaction has all the attributes of trade it must still have a commercial purpose.  

Exxon Chemical (Malaysia) Sdn Bhd v Ketua Pengarah Hasil Dalam Negeri [COA]

The words "express wholly and exclusively incurred" appearing in s 33(1) of the act includes a sum which the taxpayer is under an obligation to pay. As the appellant in this instance was under an obligation to make such payment upon the demand of eligible employees, it was correct to rely on the decision in lo & Lo. further, being a privy council decision from another jurisdiction on a provision that is materially similar to our written law, great weight must be given to it. The fact that the appellant's employees did not actually receive the money in a given year does not matter. Had any of those who were eligible to receive the benefit claimed it, then it would have been impossible for the appellant to have lawfully resisted the claim. The fact that the employees thought it fit not to make a claim but to defer it does not make the obligation to pay an expense that is incurred by the appellant non-existent. The principle that a provision in a taxing statute must be read strictly is one that is to be applied against the respondent and not in its favour. Thus, the special commissioners and the high court erred in holding against the appellant.

RHB Bank Berhad v Zalifah Binti Juan & Anor [HC]

The terms of the loan agreement cum deed of assignment ("LCDA") revealed that it was in essence an absolute assignment under s 4(3) of the civil law act 1956 and as such it was an equitable mortgage as opposed to an equitable charge. The plaintiff therefore could not rely on order 83 of the RHC in making its application as the same refers only to charge actions. Further, order 31 r 1 of the RHC did not confer the court with jurisdiction to order a judicial sale as requested by the plaintiff as the operative words in the aforesaid order as "it appears necessary or expedient". In the circumstances, it did not appear necessary nor expedient for the court to make such an order. The plaintiff could have obtained relief by exercising its contractual rights and saved the court and the defendants from wasting unnecessary time and resources, as there was no actual dispute or live issue to be judicially determined. By neglecting to prove that the defendants were in fact denying the plaintiff's rights under the LCDA, the plaintiff failed to satisfy one of the preconditions under s 41 of the act. The plaintiff therefore was also unable to rely on s 41, which provided for the discretion of the court to declare the rights of a party in situations such as in the present application. Order 92 r 4 of the RHC is clear in stating, inter alia, that the inherent power of the court is to be exercised to prevent injustice or an abuse of the process of the court. In the circumstances, the facts of the case revealed no controversy that would warrant that the court draw on its inherent powers, and as the plaintiff's contractual rights had not been disputed, it was incumbent upon to exercise those rights without the aid of the courts.

Sri Minal Construction Sdn Bhd v Mobil Oil Malaysia Sdn Bhd [COA]

The rules are only for the purpose of regulating the professional practice, etiquette, conduct and discipline of advocates and solicitors. They apply only to members of the bar, and any breach thereof is liable to be disciplined under the said rules. The rules do not have the force of law to govern the procedure of the courts. The rules regulating and prescribing the procedure in the subordinate courts are set out in the SCR, which are effected under the powers conferred upon the rules committee by virtue of s 17 of the courts of judicature act 1964. Thus the respondent's failure to provide notice before entering judgment in default did not render the same irregular. Order 28 r 6 of the SCR applies where a defendant does not appear on a date fixed for hearing. In this instance, a date for hearing had yet to be fixed. When the summons was called up for the second time on November 1, 1999, it was a mention date. Since it was not a hearing date, the provisions of order 14 r 5 of the SCR applied. When the learned sessions court judge agreed to the appellant's request for time to file its defence, the next mention date was fixed, which must be implied to mean that the defence ought to have been filed in compliance of the said order. However, at the appellant's failure to file its defence by the next mention date, and absent any explanation, the learned sessions court judge was correct to have exercised his discretion by entering the default judgment against the appellant pursuant to order 14 r 5(2) of the SCR. Although a judgment in default has been regularly obtained, the court still possesses the unfettered discretion to set it aside, where the test to be applied for such evaluation is that enunciated in Evans v Bartlam [1937] AC 473, HL. In this instance, there was no evidence that the appellant had ever complained of short supply to the respondent. Every delivery note, with the amount of diesel supplied listed thereon, was duly signed and acknowledged by the appellant as true and correct. By acknowledging on those delivery notes, the appellant was deemed to have accepted the amount supplied as correct. Merely claiming short supply was insufficient to warrant the setting aside of the default judgment. Further, the failure by the respondent to provide particulars of the claim did not constitute a defence on the merits where the appellant would have been in possession of the relevant documentation relating to the diesel supplied. The appellant failed to prove a defence on the merits.  

Abdul Hamid Bin Mahmood & Anor v Oriental Bank Berhad [HC]

In the instant case, clause 12(a) of the guarantee only related to the variation of the credit facility dispensed or dispensable by the respondent to the first defendant and did not relate to the variation of the security as required under the principal agreement. Clause 12(a) of the guarantee did not permit the respondent to uplift the FD given as security. In the circumstances, the variation in question was rendered invalid. Clause 12(a) was not ambiguous and only referred to the variation of "credit facilities". But since the respondent contended that it permitted the respondent to vary not only the credit given but also the security given under the principal agreement, the respondent gave a dual meaning to the word "credit" and/or "security", making them interchangeable. Thus, the respondents rendered their own wordings ambiguous, thereby entrapping themselves in the contra proferentem rule, which envisages that where there is a doubt about the meaning of an instrument, the doubt will be resolved against the maker. The federal court in the case of Kimlin Housing Development Sdn Bhd (Penerima Dan Pengurus dilantik) (Dalam liquidasi) v Bank Bumiputra (M) Bhd & 3 Ors [1997] 3 AMR 2361 (Kimlin) had set out a 2 limb judicial test to interpret whether a statute permits a person to contract out of it. Firstly, a person can contract out of an act of parliament if the language of the statute is clear to that effect. If the language of the statute is not clear, the second limb comes into operation, which requires the court to examine the overall purpose of the statute to ascertain whether that person or class of persons could or could not contract out of the statute. Further, the basis of a contract is found in the doctrine of consensus ad idem which in simple language means a meeting of minds for a binding contract. When a surety executes a guarantee agreement, it is expected that he knows what his liability is under the doctrine of consensus ad idem. By permitting the creditor to vary the credit to be given to the debtor without the consent of the surety, the surety is placed in a position of not knowing what his liability will be, thus contravening the doctrine of consensus ad idem, which doctrine goes to the root of the law of contract. It is for this reason that s 86 should be interpreted in a way that would not allow the creditor to impose a liability on the surety, which liability the surety has no knowledge of. The federal court in Citibank NA v Ooi Boon Leong & Ors [1981] 1 MLJ 282 was correct to point out that, any variation to the principal agreement is permitted by s 86, but only with the consent of the surety. In the instant case, the covenant which allows the respondent to vary the interest rate depends on the market forces over which it has no control and therefore the variation of interest rate would be accepted under the de minimis rule and would not be caught by SS 86, 92 and 94. But the same could not be said of the respondent varying the other terms in the principal agreement, over which parties have control and/or ascertainment of, since such a variation would infringe the rule on consensus ad idem and bring into operation SS 86, 92 and 94, which forms the basis of the law of surety. The privy council's decision in Ooi Boon Leong was distinguishable as the principal debtor in that case was a company of which the directors were the sureties. All sums borrowed in that case had been enjoyed by the directors who were de facto human entities for the principal debtor and the privy council had to do justice to the case by not allowing the sureties to escape liability by the directors/sureties resorting to of SS 86, 92 and 94. Sections 86, 92 and 94 are intended to protect sureties who do not enjoy the benefit of the loan sum but only make themselves liable for the debt, regardless of whether they had purportedly contracted themselves out of the relief provided for them under the Act. The issue of contracting out of an act of parliament was a point of law decided on facts admitted by the parties, without any dispute of facts or questions as to the credibility of witnesses, nor did it require the parties to give viva voce evidence. Thus, the issue raised being a plain and obvious one could be resolved by summary procedure. Further, this case had seen protracted litigation and it was in the public interest that there should be an early end to it. In the circumstances, there was no valid reason why the respondent's case against the appellant should not be concluded summarily.

Perman Sdn Bhd & 6 Ors v European Commodities Sdn Bhd & Anor [COA]

The plaintiff's claim of the existence of a constructive trust was misconceived since a constructive trust is imposed only by operation of law. A genuine constructive trustee has title to the property or claims the right to deal with the property on behalf of the beneficial owner. Only the owner of property may declare himself as trustee of the same. In the high court, the parties proceeded on the basis that Raja Zainal was owner of the shares, whilst it was the first defendant who was the registered owner of the shares. Thus, only the first defendant could be trustee of the shares since a company is a separate entity from its shareholders. shareholders do not have any interest, whether beneficial or legal, over the company's property. In this instance, there was no evidence that the first defendant had declared itself trustee of the Fimaly shares. It was not the plaintiffs' case that they purchased the Fimaly shares but then registered the first defendant as nominal owner. Therefore, the doctrine of resulting trust was not applicable to facts in the instant appeal. The only reasonable inference to be drawn from the proved and admitted facts is that this was in reality a case of debt and not an express trust. The memorandum executed by Raja Zainal makes no mention that he was a trustee and only confirms the fact that the money paid for the shares was an advance from the plaintiffs. For the first defendant to be accountable to the plaintiffs for the Fimaly shares, the monies paid to Raja Zainal must be trust monies in the sense that they were to be used for a specific purpose. If that purpose failed, there would have been a resulting trust in the plaintiffs' favour. Here, Raja Zainal was a trustee of the money, which he would have been in breach of if the money had been used other than for the purchase of Fimaly shares. If the first defendant dishonestly assisted Raja Zainal, then it would be liable as a fiduciary with a duty to account for the money. Here, the monies were used for their intended purpose and therefore, the beneficial ownership in the money vested in its intended recipient, i.e. the first defendant. When the shares were registered in its name, the first defendant became the sole beneficial owner of those shares. This reinforces the conclusion that the advance given to Raja Zainal was in fact a loan. If it had been established that Raja Zainal had, acting as the first defendant's agent, declared the first defendant the trustee of the Fimaly shares, then this argument would have succeeded. The memorandum executed by Raja Zainal however does not constitute him as a trustee and the language of the document itself does not betray such an intention. Therefore, there was no evidence, from the memorandum or the surrounding circumstances that show a clear intention to create a binding declaration of trust on the first defendant's part.  

Simpang Empat Plantation Sdn Bhd v Ali Bin Tan Sri Abdul Kadir & 5 Ors [COA]

Res judicata is a doctrine of substantial justice where justice is achieved procedurally by precluding a party from re-agitating issue(s) in subsequent proceedings that has or could have been fairly determined in earlier proceedings between the parties. Whether res judicata should be permitted must be determined with regard to the particular justice and facts of each case. Allowing the second suit would prevent an abuse of process. The effect of Kimlin was that the r & m did not have the power to deal with the subject property, where the fourth respondent should have satisfied the debt owed to it according to the provisions of the NLC. There were sufficient facts to show that justice favoured the re-opening of the propriety of the sale of land by the r & m. Since the r & m did not have the right to sell the subject land, then no title could have passed to the purchaser. Therefore, the justice of the case demands that those not entitled in law to have property must return it. Pursuant to s 192(2) of the companies act 1965 (the act), the r & m are liable for any misfeasance on their part. The said section was introduced to remedy the injustice where, at common law, a receiver and manager appointed under the power conferred under a debenture owes a duty only to the debenture holder. A receiver and manager is also not an officer of the borrower company within the meaning of s 4(1)(b) of the act and thus does not fall within s 305(1) of the same. Section 305(1) of the act provides a summary method of enforcing pre-existing rights whilst s 192(2) created a new cause of action to prevent injustice under the common law. Reference to cases decided under s 305(1), or its equipollent, must be cited with caution since those cases would not be dealing with a remedial provision. Penalising the r & m for doing an act they were not entitled to do would not constitute an interference with their function since it would amount to holding wrongdoers accountable for their actions. Further, there is no issue that the appellant's assets would be imperiled since if the appellant's summons concludes in its favour, the subject land would be returned to it, which could only be considered a benefit.  

EON Bank Bhd v Edwina Lau [HC]

The plaintiff ought to have sought an appointment with the registrar to sort out the terms of the draft order as required by order 42 r 8(3) of the RHC as he was the one who prepared the draft order instead of requesting that a decision to be made on its term because 48 hours had lapsed. Allowing counsel to proceed with a disputed court order would be a waste of judicial time if at the end of the day the sealed court order was not in accordance with the terms of the ruling of the presiding judge. The primary concern of the parties must be to sort out the terms of the order and the only way this can be done is for the parties to go back to the presiding judge to clarify the terms of the ruling. Counsel should not come before the court to argue on an order, which terms are in dispute.  

Lim Chau Leng (P) v Wong Chee Chong [HC]

Granting of leave does not amount to a finding of contempt. That can only happen at the hearing of the substantive motion upon proof beyond reasonable doubt. The objection raised was not procedural but substantive in nature and goes to the root of the cause. The consent order had taken the place of the initial agreement (arrived at by the negotiations of both parties out of court) by merger and the wronged party may take out enforcement proceedings for a breach on the basis that there is a valid contract. The terms said to be in breach does not give rise to a proceeding in contempt. For there to be a contempt of court based on a consent order, the same must contain an express undertaking to the court. This express undertaking was absent in this case thus absolving the plaintiff of guilt. Further, the plaintiff's denial of the existence of any agreement, disentitled her to claim anything from the defendant under the order as there was, consequentially, no collateral bargain between the parties that might have given rise to a debt recoverable at law. Had the divorce petition been heard on its merits and the court had come to a finding of fact on all issues and ordered the defendant to do all that is now found in the consent order, then that would be an order of the court which was in coercive terms, which a breach thereof would have attracted committal proceedings. The failure to carry out the terms, although a breach, was not susceptible to contempt proceedings. The rationale is that the affront committed by the breach was not done to the court but to the parties of the compromise or consent order, which in this case was the plaintiff. What was important was that the terms agreed upon came from the parties to the court and not from the court to the parties. Though the consent order was with the seal of the court affixed to it made it a court order, it lacked coerciveness taking into account the manner the consent order came about. The court merely acknowledged this agreement between the parties by affixing its seal, which brought the suit to an end. The defendant by making these promises (and the plaintiff accepting them) did not deceive the court into bringing the suit to an end. The decision to compromise and to end the suit was entirely by the parties. The law of contempt does not envisage the institution of committal proceedings for a breach of a term agreed by parties merely because it was embodied in a court order. If one spouse wished to commit the other, an undertaking to the court must be incorporated into the consent order.  

Dato' Seri S Samy Vellu v Penerbitan Sahabat (M) Sdn Bhd (sebagai penerbit Akhbar "Malaysia Nanban") & Anor [HC]

The correct test for recusal of a judge on the ground of bias, is the real danger of bias test as laid down by the House of Lords in R v Gough [1993] AC 646. The real danger of bias test is a stringent test and surmise or mere conjecture would not be sufficient to satisfy such a test, nor would mere suspicion, however reasonable it may be. The fact that encl 36 was dismissed must not be construed to mean that this case would not be decided on the evidence before the court at the trial of the main suit. An adverse finding of fact by a judge against a party in earlier proceedings does not give rise to the real danger of bias on the part of the judge in the forthcoming proceedings. In any event, and based on the facts and circumstances in this case, the allegation of pre-judgment, cannot in law, amount to a real danger of bias. The best recourse for the plaintiff would have been to appeal to the Court of Appeal against the first judgment instead of filing encl 59. By filing the same, the plaintiff was in fact, obliquely eroding public confidence in the judiciary. In the circumstances, encl 59 ought to be dismissed with costs to be paid to the defendant pursuant to Order 59 r 4(1) of the RHC. Further, the plaintiff's failure to comply with the undertaking to file the affidavit in support of the encl 59, which affidavit, pursuant to Order 92 r 1 of the Rules of the High Court 1980 (the RHC) shall be in the national language, constituted an infraction of Order 32 r 13(2) of the RHC. Bereft of such an affidavit in support, in the national language, encl 59 stood alone and on this basis must be dismissed with costs. Where a defendant has pleaded qualified privilege, the plaintiff, pursuant to Order 78 r 3(3) of the RHC, must deliver a reply to the defence pleading malice, to negate the defence of qualified privilege. In this instance, the plaintiff had failed to comply with the said provisions and such failure must mean that the defendants' plea of qualified privilege stood unassailed. Following the decision in Harakas & Ors v Baltic Mercantile and Shipping Exchange Ltd & Anor [1982] 1 WLR 958, the court will not grant an injunction where a defence of justification and/or qualified privilege is pleaded, and where the defendant swears that he will seek to prove the same at the trial, unless exceptionally, the court is satisfied that the defence is one that cannot succeed. As regards the tort of malicious falsehood, the ruling in Bonnard v Perryman [1891] 2 Ch D 269 still holds good and an injunction will not be granted where the defendant states that he intends to justify.  

Tengku Mohd Saad @ Tengku Arifaad bin Tengku Mansur & 3 Ors v Tay Choo Foo @ Tay Chiew Foo & 4 Ors [HC]

The essential ingredients required to sustain an action against the third, fourth and fifth defendants as constructive trustees of the said shares had been sufficiently pleaded in the statement of claim as the courts would consider and deal with the legal result of the pleaded facts even if the particular legal result is not specifically pleaded. A constructive trust arises by operation of law when it is unconscionable for the legal owner of the property to assert beneficial ownership in the same. Therefore, there was no necessity for the plaintiffs to plead a constructive trust over the shares as against the third, fourth and fifth defendants. The doctrine of dishonest assistance and knowing receipt were inapplicable in the instant case since the plaintiffs were not pursuing a personal remedy against the third, fourth and fifth defendants. The plaintiffs here were pursuing a proprietary claim, which allowed them to trace the trust property to the third, fourth and fifth defendants and it mattered not that the person(s) holding the trust property committed no wrong. Where property is the subject matter of a trust, the trust follows the legal estate wherever it goes, unless it comes into the hands of a purchaser for valuable consideration without notice. Having regard to the testimony and documentary evidence tendered, the plaintiffs proved on a balance of probabilities that the first defendant held the impugned shares in the second defendant on trust for the deceased. Further, the first defendant breached his express undertaking in an interlocutory order, in lieu of the plaintiffs' application for an interlocutory injunction restraining him from selling, transferring, assigning, charging or dealing with the said shares until the trial of the instant action by transferring the shares to the third defendant. The statements made by the deceased to PW2 regarding the beneficial ownership of the shares until the first defendant had settled the purchase price, admissible as an exception under s 32(1)(b) of the Evidence Act 1950 as statements made in the ordinary course of business, further showed that the first defendant was not entitled to ownership of the same and that the grounds advanced by him were fabrications. Contemporaneous documentation and the objective facts clearly supported the plaintiffs' claim that the deceased retained beneficial ownership in the shares until and unless the first defendant had settled the full purchase price agreed to.  

Asia Pacific Land Berhad & 5 Ors v Datuk Bandar Kuala Lumpur [HC]

Where an application for leave to amend a statement of claim is made, the following requirements would have to be fulfilled, before such leave may be granted, i.e: (i) That the new cause of action arises out of the same or substantially the same facts as the cause of action in respect of which relief had already been claimed in the original action. (ii) In considering the question of whether it is just to grant leave to make the amendment, the court must be vigilant and must weigh in a balance between the applicant's need to amend as against the prejudice which the opposing party's interest may suffer. (iii) In determining the appellant's need to amend, the court is entitled to take into consideration the following factors: (a) If the applicant's existing claim is bound to fail, that may be the barometer to use as it may possibly be relevant to show where the justice of the case lies. (b) If the applicant's existing claim is bound to succeed, that could conceivably be relevant in deciding whether to allow a different cause of action leading to the same remedy but requiring further cogent facts to be pleaded. (c) If the new claim of the applicant is bound to fail, then leave should be refused forthwith by applying the ordinary principles of law. (d) If the new claim is bound to succeed, that may affect the justice of the case. (iv) In an evenly balanced case, it is for the applicant to satisfy the court that it is just to grant leave to amend based on the decision in Hancock Shipping Co Ltd v Kawasaki Heavy Industries Ltd (The Casper Trader) [1992] 3 All ER 132, CA at p 137; (v) What is said to be just would inevitably be dependent on the judge's impression and discretion. In this instance, the above requirements had not been satisfied. The new causes of action sought to be included, did not arise out of the same facts or substantially the same facts and neither was there any sufficient overlay of the facts. In the circumstances, it would not be just for the leave prayed for to be granted. Pursuant to s 124 of the Local Government Act 1976 and s 11 of the Federal Capital Act 1960, the provisions of the Public Authorities Protection Act 1948 (the Act), would apply in relation to the defendant in this instance. Since the alleged cause of action arose in September 1997, the plaintiffs' cause of action would be barred by limitation in September 2000, by virtue of s 2 of the Act. There was no explanation for the delay in the filing of the plaintiffs' application and in the absence of such an explanation, there was therefore no material before the court for it to weigh in a balance, the proposed amendments. The delay in the circumstances, was fatal. Order 1A of the RHC was inapplicable in this instance, as there were no preliminary objections raised by the defendant with regards to non-compliance of any of the rules. On the facts, and based on the settled propositions of the law, the court's exercise of its discretion under Order 25 r 5(5) of the RHC to allow the proposed amendments in this instance, was unwarranted.

Yong Kon Fatt v Indah Water Konsortium Sdn Bhd [HC]

The appellant is required in law to adduce evidence by way of an affidavit in reply, to oppose the respondent's striking out application. The failure on the part of the appellant to do so was fatal as the appellant is deemed to have admitted the respondent's assertion that the appellant had not provided the sewerage services as claimed. The failure by the appellant to challenge or rebut the respondent's assertion that no sewerage services were provided by the appellant, would constitute an admission by the appellant of that fact. On the facts and circumstances of the instant case, and in view of the appellant's failure to file and affidavit in reply to the respondent's assertion, it was appropriate for the magistrate to have struck out the appellant's claim. It may be envisaged from the provisions of Regulation 7 of the 1994 Regulations that the appellant is obliged to state the particulars and basis of calculation of the sewerage services provided to the respondent, and which the appellant failed to do in his statement of claim. Whilst the omission or failure to include the details itself does not necessarily make the claim unsustainable in law, but where however the claim is challenged and denied as in this case, the appellant is obliged to provide such details by way of affidavit in reply, in order to sustain the claim for determination at a full trial. A magistrate who has reserved his decision in an interlocutory application, is not required under the Subordinate Courts Rules 1980 (SCR) to provide the grounds for this decision. By virtue of Order 49 r 6 of the SCR, it has been deemed fit by the rules committee for the grounds of judgment in interlocutory applications to be dispensed with, with the sole object of ensuring speedier disposal of appeals arising out of a decision given in such interlocutory applications. Further, and as provided under the proviso to Order 49 r 6(3) of the SCR, the record of appeal "should not include grounds of judgment". However, and notwithstanding the aforesaid provisions, it would be good practice to provide brief reasons, be it in a summary form, when giving oral decisions.

E & E Equipment Sdn Bhd v Speci Avenue (M) Sdn Bhd & 3 Ors [HC]

The plaintiff failed to adduce any evidence to prove that the cranes were in the defendants' possession at the material time. Therefore, the plaintiff failed to discharge the burden of proving beyond reasonable doubt that the cranes were in the possession, custody or control of the defendants when the injunction order was served on them. Since the standard in contempt proceedings is beyond reasonable doubt, the plaintiff's case fell short and any argument based on mere implication would not satisfy the required standard. Further, the defendants' counsel's failure to reply to the plaintiff's affidavit in support of the instant application could not reasonably, or in law, bind the defendants on a criminal charge for contempt.  

Faridah Ariffin v Dr Lee Hock Bee & Anor [HC]

In Malaysia, experts' reports are privileged documents and form part of the fundamental common law right encapsulated in s 126 of the Evidence Act 1950 (the Act). There is no provision in Malaysian law that will compel a witness to produce, before trial, a written statement of his evidence. Pursuant to Order 25 r 4 of the RHC, the defendants have the inherent right not to present evidence until the close of the plaintiff's case. Since Order 34 r 4(2)(j) of the RHC further provides that "subject to all just exceptions as to privilege", it may be readily concluded that privilege may not be removed by the RHC. The provisions of the RHC must be read subject to the Act. Further, Order 25 r 8(5)(b) of the RHC expressly excludes any action where the pleadings contain an allegation of a negligent act or omission in the course of medical treatment from the class of cases where there is a duty to disclose experts' reports. Although the operation of Order 25 has been suspended by the Honourable Chief Judge of Malaya by the coming into force of Practice Direction No. 1 of 2001, the requirements under r 8 thereof remained. Confidential communications made in contemplation of, or after the commencement of litigation between a lawyer and his client, a lawyer and a non-professional agent, or a lawyer and a third party for the sole, or dominant purpose of litigation are protected by privilege unless waived by the holder of that privilege. The court cannot make an order of discovery of the report and therefore, r 4(2)(f) and 4(2)(j) of order 34 of the RHC conflict with the relevant provisions of the Act as well as the common law principles of privilege. Order 35A rr 1 and 2 of the RHC provides the court with the discretion, where parties have agreed, to allow evidence-in-chief by way of affidavit, excepting witnesses' statements. Section 138(1) of the Act provides that witnesses shall first be examined-in-chief, cross-examined and if required, re-examined orally. The taking and recording of oral evidence by the presiding judge must be done transparently as provided by s 15 of the Courts of Judicature Act 1964 (CJA). Order 35A r 1 of the RHC is therefore contrary to s 138(1) of the Act and s 15 of the CJA and thus void for being subsidiary legislation inconsistent with the Act of Parliament as envisaged by s 23(1) of the Interpretation Acts 1948 and 1967. Since Order 35A is void for inconsistency, there is no statutory provision by which the court may order an affidavit to be made or affirmed for use at trial. It may, where justice requires order an affidavit already made or affirmed to be read at trial. Pursuant to Order 35 r 4 of the RHC, the duty of the plaintiff to give evidence arises only at the trial proper and not before it commences. A defendant is not obliged to give evidence and also not obliged to provide witness statements in advance of the trial. Procedurally, witness evidence is given orally at the trial, the recording of which constitutes a judicial function. If evidence is prepared in the form of witness statement in the privacy of a lawyer's office, there is no opportunity for the trial judge and the other parties to observe the demeanour of the witness or to object to matters pertaining issues that may arise as to credibility, competency, hearsay, admissibility, leading evidence and harassment. This would provide ample occasion for the miscarriage of justice. It was for reasons such as these that s 73A(3) of the Act provides, in effect, that a witness statement is inadmissible where it is "made by a person interested at a time when proceedings were pending or anticipated". The safeguards of truth provided by the Act would vanish if witness statements are admitted in lieu of oral evidence-in-chief. It would be fallacy to consider witness statements as the record of oral evidence given before a trial judge. Cross-examination of a witness on his pre-recorded statement, and taken as his evidence-in-chief, would not constitute an adequate safeguard. It is oral testimony in court that ensures justice is seen to be done.  

Laksmana Realty Sdn Bhd v Goh Eng Hwa (and Another Appeal) [COA]

The plaintiff was not authorised under the writ of possession to remove the defendant's goods. If it had wanted to have the said goods removed, then it should have obtained an order from the court to that effect. The learned judge was perfectly entitled to make the findings that he did with regards to the lost receipts and had correctly addressed his mind to the crucial fact that the plaintiff had not challenged the number of goods that formed the subject matter of the defendant's claim. However the classification of the award as being general damages was an error since general damages are awarded for harm that is not quantifiable. Where as in this case, the value that is to be placed on the defendant's goods is something that is readily quantifiable then compensation for the loss thereof, should be in the form of special damages. The error in the classification of the award in this instance however did not flaw the judgment, since the trial judge had adopted the correct approach and had taken the relevant matters into consideration in arriving at his decision. The decision in Tan Kuan Yau v Suhindrimani [1985] 2 MLJ 22, lays down the approach that should be adopted by the appellate court in an appeal against quantum of damages in cases relating to special damage and in this respect, the plaintiff had fallen far short of the standard called for in the said decision. In the circumstances, no appealable error had been demonstrated by the plaintiff. Rookes v Barnard [1964] AC 1129, sets out the basis for making an award of exemplary damages. The present case however does not fall within the second category of cases referred to in Rookes v Barnard as claimed by the defendant. The plaintiff was merely seeking to get back possession of its land. There was no question of the plaintiff obtaining a profit at the expense of the defendant in this case. The conduct of the plaintiff in seeking a writ of possession after it had notice of the defendant's application to set aside the judgment, did not amount to conduct calculated at making a profit at the defendant's expense. At best, it was procedural misconduct for which they are liable in cost. In the circumstances, this was not a case for exemplary damage.

Re Lim Szu Ang; Ex parte Kewangan Utama Berhad

In light of the provisions of Order 45 r 1(1) of the Rules of the High Court 1980 (RHC), the commencement of a bankruptcy proceeding is not an enforcement of a judgment or order. A bankruptcy proceeding is a proceeding that would eventually result in the issuing of adjudicating and receiving orders whereby the judgment debtor is required to account for his assets and liabilities to an official receiver or official assignee (now known as the director general of insolvency) as the case may be, for the purpose of satisfying all his creditors including the judgment creditor who has petitioned for the bankruptcy. Hence if the judgment creditor wanted to enforce the said order it should have used one of the methods of enforcement as specified in Order 45 r 1(1) of the RHC. An action on a judgment is not the same as enforcing a judgment. In enforcing a judgment, a party in whose favour the judgment is given, is taking a proceeding against the adjudged party in order to force that party to satisfy the terms of the judgment in accordance with the rules relating to the enforcement of judgments. However in an action on a judgment, the party that obtained the judgment is not enforcing the judgment as understood under the rules. Instead the party concerned is exercising his rights arising out from the judgment and given to him under the rules or a written law, by a separate and distinct action or proceeding. The outcome of such action or proceeding may however result in the satisfaction of the judgment by the party against whom the judgment is obtained. That being the case, the judgment creditor's submission that it is not prevented by article 98 of the schedule to the Ordinance from taking out the BN and presenting the CP against the judgment debtor, is not entirely correct, because the use of the words "upon judgment obtained in Sarawak..." appears to include the enforcement of judgment as well as action on a judgment. The language of articles 44 and 98 of the schedule to the Ordinance , are akin to the second and first limbs respectively, of s 6(3) of the Limitation Act 1953 (the Act). On the facts it was obvious that the BN was issued 3 years after the interest became due. Thus, applying the decision in UMBC Bhd v Ernest Cheong Yong Yin [2002] 2 AMR 1803, FC, it was clear that the BN was issued out of time under article 44 of the schedule to the Ordinance and was therefore invalid and bad in law. Consequently, the CP that followed was also bad in law for having been pre-empted by an invalid bankruptcy notice.

Tay Seck Loong @ Tay Seck Long & 3 Ors v Teh Chor Chen & 40 Ors (Administrator De Bonis Non of the Estate of Teh Aik Hee @ Hong Seng alias Teh Aik Yee, deceased) [HC]

Cases of partial intestacy would only arise under s 8 of the Distribution Act 1958 (the Act) which, where relevant, provides that where any person dies leaving a will beneficially disposing of part of his property, the provisions of the Act shall have effect as regards the part of his property not so disposed of, subject to the provisions contained in the will. On the facts, the testatrix had vide clause 4 of her will, devised and bequeathed all her movable and immovable properties to her trustee. By virtue thereof, the will has brought about a complete testamentary disposition. Hence there is no question of a partial intestacy coming within the ambit and purview of s 8. The legal effect of s 19 of the Wills Act 1959 is that a lapsed gift must be included in and form part of the residuary devise or bequest, if any, contained in the will. Applying the said provision and the decision in Re Chin Sem Lin's Settlement Yong Tet Foong & Anor v Chin Thin Lee & Ors [1971] 2 MLJ 152, the 3 lapsed gifts fall into the residuary estate of the testatrix for the benefit of all the grandsons living at the date of distribution and are to be distributed in accordance with the terms of the will. On the facts, all of the testatrix's grandsons were of natural issue. There were no grandsons who were adopted, legally or otherwise. For the purposes of the true construction of the will, there was no plausible ground advanced by the plaintiffs for the exclusion of any of the grandsons. In the circumstances all of the grandsons having the family name or surname in the Chinese character Tay, Tey or Teh, are within the meaning of the word "grandsons" in the will of the testatrix and shall benefit in accordance with the terms thereof.  

Fawziah Holdings Sdn Bhd v Metramac Corporation Sdn Bhd (dahulunya dikenali sebagai Syarikat Teratai KG Sdn Bhd) (No 1) [COA]

In dealing with this application, the Court of Appeal was exercising its original jurisdiction under s 44 of the CJA. Section 44(1) of the CJA uses the words "in any proceeding", where s 3 of the same defines "proceeding" to mean any proceeding whatsoever of a civil or criminal nature and "includes an application at any stage of a proceeding". Therefore, when the court makes an order under s 44(1) of the CJA, it does not deal with the appeal proper and hence, it has original jurisdiction, although limited. In this case, the appeals by both sides have been heard and judgment reserved with only the grounds of decision remaining to be delivered. There was therefore no appeal pending before the Court of Appeal. The interim protection was applied for from the date between judgment and the grounds thereof. This was therefore an invitation to exercise original jurisdiction, which was possible due to s 44 of the CJA. Since this application did not involve the exercise of jurisdiction on a matter originating in the High Court, an appeal to the Federal Court would not be available. An order to earmark a sum amounting to RM100 million would be ineffective. The relationship between the plaintiff and the defendant is that of a judgment creditor and debtor, with the plaintiff in the same position as an unsecured creditor. The order sought will have the effect of creating a special fund in the plaintiff's favour to meet his unsecured debt, which will constitute undue preference in the plaintiff's favour and will accordingly be void against the defendant's other creditors in the event of a winding-up. Therefore, although s 44 of the CJA is wide, it did not authorise the court to make the order sought by the plaintiff. The facts in Polly Peck and those in the instant case are distinguishable. In Polly Peck, the plaintiff was the beneficial owner of the monies diverted by the first defendant, Nadir. It had a right in equity to trace all or part of the money into the hands of a third party. Here, the relationship between the plaintiff and the defendant was not one of fiduciary and beneficiary. Whatever monies the defendant has belongs to it and not to the plaintiff. The plaintiff has a judgment that it may execute at the appropriate time. The facts of this case require the interim protection of the plaintiff's accrued rights in view of the serious allegations of fact made, which have been denied by the defendant in general terms. The defendant also failed to be forthcoming as to facts within its particular knowledge. The order herein is one that restraints the defendant from disposing or dissipating its assets up to RM100 million and is a form of post judgment mareva injunction that provides the plaintiff with the necessary interim protection until further order.  

Mohd Salleh bin Sheikh Ahmad v Yewpam Sdn Bhd [COA]

The learned judge was completely justified in rejecting the defendant's evidence for lack of credibility. It is trite that once a counterclaim is found to be lacking in merit, it ought to be dismissed. The court is not entitled to raise a dead counterclaim on the basis of granting relief that the court thinks ought to be granted on the facts. Further, a prayer in the counterclaim may not be used against the defendant himself. The plaintiff could not rely on the counterclaim to obtain relief against the defendant. The learned judge was justified in awarding damages in lieu of specific performance as far as order (1) was concerned. Order (2), although not claimed by the plaintiff, was a necessary adjunct and hence, a consequential order. Order (2) was supportable on the basis that the High Court was being moved for equitable relief in the form of specific performance and when considering the grant of equitable relief, as a court of equity, it is entitled to grant alternative relief or to impose conditions.

Tan Ah Tong v Gee Boon Kee & 27 Ors [COA]

Where, in an appeal in a civil matter, the grounds of the decision are unavailable, the appeal should proceed to examine and assess the evidence to enable the appellate court to decide whether the evidence justified the decision appealed against or otherwise. A new trial ought not to be ordered unless there is something crucial to a just decision that may be established in a new trial that cannot be established on an assessment of the evidence already before the appellate court. This is so especially in cases where the credibility of non-expert witnesses needs to be established where the evidence of one side is equally cogent when compared with the conflicting testimony of the other side. In such a case, a new trial may be necessary so that the new trial judge will be able to observe the demeanour of the witnesses. Expert witnesses are excluded from this requirement since their testimony is intellectual in nature and is accompanied by reasoning and analysis that supports the opinion they have formed. An appellate court may, without the aid of demeanour, be able to decide which opinion to accept. The appellant in this instance failed to show why the court would not be able to resolve the issues, pertaining to the solicitor's abscondment and whether full payment of the purchase price had been made, by an assessment of the evidence before the court.

Tang Kam Thai & 133 Ors v Langkah Cergas Sdn Bhd & 4 Ors [HC]

It was clear from the first defendant's defence that it had admitted the delay in handing over vacant possession of the properties, but attributed such delay to various circumstances beyond its control. The defendant cannot be exempted by reason of such circumstances from fulfilling its obligation to pay the purchasers the agreed liquidated damages in view of the terms of the said agreements, which are explicit. On the facts, the first defendant is liable to pay the liquidated damages for the delay in delivering vacant possession of the properties. As regards the plaintiffs' claim for delay in delivery of vacant possession of the common facilities, which claim had not been proved to the satisfaction of the court, it would not be justified for any interim payment to be made by the first defendant. On the facts there was wilful delay on the part of the first defendant. The excuses given for the delayed completion of the commercial properties were substantially the same as reasons offered for the delay in delivering vacant possession of the residential properties, and were without legal justification.  

Fawziah Holdings Sdn Bhd v Metramac Corporation Sdn Bhd (dahulunya dikenali sebagai Syarikat Teratai KG Sdn Bhd) (No 2) and Another Appeal [COA]

The defendant first claimed that the plaintiff had breached its fiduciary duty and then claimed that clauses 2.2 and 9.5 of the restructuring agreement were void. However, equitable protection such as that given to a beneficiary, or to whom a fiduciary duty is owed, gives the victim right to avoid or affirm the transaction. The distinction between a voidable and void transaction is that the former may be affirmed while the latter may not. Therefore, the declarations sought could not be granted in law. The defendant here was seeking to avoid selected parts of the transaction, seeking reprobate and aprobate, which it could not do. The defendant's complaint that the signage agreement and the amending agreement thereto were tainted because Dato' Fawziah and her mother signed those documents on behalf of the plaintiff and the defendant were without merit. By the time the amending agreement was signed, the investors in STKG, being majority shareholders had control of the company for 2 years. The defendant's contention overlooks the proposition that in company law, the company is a separate entity from the shareholders. Further, even assuming that the defendant's shareholders were entitled to claim for the defendant, they would have to come to court with clean hands. However, they were the ones who misappropriated the defendant's property in the amount of RM32.5 million and oppressed the defendant's previous shareholders into parting with their shares. The learned judge addressed his mind to the unamended clause 8 of the signage agreement. However, recitals F and G of the second concession agreement makes it clear that the first concession agreement was terminated by mutual agreement and accordingly, the defendant was liable to pay the plaintiff compensation in the formula expressly agreed to by the parties. The learned judge had therefore misdirected himself on the facts. Having correctly held that the defendant was liable to the plaintiff, the learned judge declined to apply the formula as set out in the amended clause 8 and treated the case as one of ordinary breach of contract, falling within the terms of s 75 of the Contracts Act 1950 (the Act). However, the formula as set out in clause 8 of the signage agreement is not "a sum named in the contract" as provided by s 75 of the Act. It is also not a stipulation by way of penalty since there was nothing extortionate about the formula. It is not directed at ensuring that the defendant performs its obligations under any contract it had with DBKL. Clause 8 came into operation upon the happening of a contingency, namely, the mutual termination of the first concession agreement, and thus had to be used to calculate the losses suffered by the plaintiff. Further, s 75 of the Act does not apply on the facts of this case because it is concerned with the question whether the sum or stipulation named in the contract is a genuine pre-estimate of damages that the innocent party may suffer in the event of a breach. It has no application to an action for a simple debt, although it does apply to extortionate claims of interest on a debt. The clause 8 claim here was an action to recover a debt owed by the defendant to the plaintiff in the sum of RM65,182,920 arrived at in accordance with the formula. The learned judge found clause 9.4 of the second concession agreement void for uncertainty as a matter of contract pursuant to s 30 of the Act. However, the actual words in the clause, i.e. "the future contracts shall be held by the vendor on trust for the purchaser", create an express trust. The fact that the trust was created by way of a clause in a contract makes no difference and it is still a trust as held by Royal Brunei Airlines v Philip Tan Kok Ming [1995] 2 AC 378. The trust is not void for uncertainty as the subject matter of the trust is clearly identified by the restructuring agreement. Clause 1.1 states clearly that any "future contract" means "any contract relating to any project or the construction of any works entered into or to be entered into with the Datuk Bandar Kuala Lumpur or any other person, other than such projects or works relating to the first concession agreement". So if and when the defendant secures a contract with DBKL, or any other person for a project, the contract is immediately charged with a trust. The defendant also had a contingent, if not vested, right to secure the contract with DBKL in the form of the second concession, which is clear from contemporary documentation. A specific trust account was to be set up in a named bank at an identified address. The defendant was therefore a trustee under a duty to open and maintain a trust account and pay into it monies coming into its hand under the second concession agreement, where the failure to do so constituted a breach of trust. Therefore, the second concession agreement was trust property, of which the defendant was trustee and must account to the plaintiff for. Looking at the totality of evidence, both oral and documentary, it was fair inference that the plaintiff and defendant conducted themselves as though the plaintiff was entitled to the signage rights. In its letter to the Ministry of Works dated June 15, 1991, the defendant included a claim of RM63 million, which sum represented the loss of the plaintiff's advertising rights.  

Kerajaan Malaysia v Yong Siew Choon [FC]

There was no dispute that the judgment of the Court of Appeal was an excellent exegesis on Order 15 r 6A of the RHC. However, there had been no analysis of its inapplicability to proceedings for the recovery of tax in the light of relevant provisions in the Act itself. The object of Order 15 r 6A of the RHC was to provide a remedy where there is no person in law who can be sued. It was therefore superfluous to state that even where no grant of probate or administration has been made to the estate of a deceased person, Order 15 r 6A will have no application if there is, in law, a person who can be sued. An executor de son tort is such a person. In matters relating to the assessment and chargeability to tax of an estate, the specific provisions to make the executors liable are ss 64(1) and 74(1) of the Income Tax Act 1967 (the Act). It was therefore clear that the person assessable and chargeable to tax in the case of the estate of a deceased person is his executor. In its legal sense the word "executor" is a reference to a person who has obtained the grant of probate or of letters of administration of a deceased person. Such a person has the capacity to sue or to be sued. The definition of "executor" and "administrator" in s 2 of the Act, which refers to persons who are legally appointed only means that the "person administering or managing the estate of a deceased person" is not one who is appointed. The Act has given an extended meaning to the word "executor" by including in its definition a person administering or managing the estate of the deceased. The High Court's finding that the respondent was the person administering the estate of the deceased was therefore correct in law.

Lim Teck Kong v Dr Abdul Hamid Abdul Rashid & Anor [COA]

The learned judge considered evidence from both the expert witnesses but preferred Dr Ramli's evidence on the ground that his investigation was carried out closer in time to when the incident occurred. Further, Dr Ramli's evidence was supported by the fourth defendant himself when he admitted that he did not do a thorough testing of the soil on which the bungalow was built. This constituted negligence on the fourth defendant's part. There was no error attributable to the learned judge. The learned judge did consider Kerajaan Malaysia and Teh Khem On as may be seen from his grounds of judgment. Both were judgments of the High Court and thus did not bind the learned judge. There was no merit to this submission. In any event, the losses suffered by the plaintiffs did not constitute pure economic loss. The evidence shows that the bungalow collapsed a few years after the plaintiffs took up residence and that the cause of the collapse was the first defendant's failure to conduct thorough tests on the site. It was the first defendant's duty as the consultant employed by the plaintiffs to ensure that the land was safe to build on.

Proview eBook Bi-Weekly Offer - Get your copy at 20% off!

Proview eBook Bi-Weekly Offer - Get your copy at 20% off! ...